Reform of Competition Acts
Sector-Specific Regulation
Impact on Markets

Reform of Competition Acts

The government-appointed Competition and Mergers Review Group recently published a comprehensive review of Irish competition legislation. The report incorporated 22 recommendations for reform of the competition acts. The recommendations were principally designed to improve the effectiveness of the existing legislation. They do not propose fundamental changes to the legislation's structure, which is modelled on the EU competition rules.

The report refers to the potential impact of the European Commission's recent proposals for the modernization of competition law, but it does not consider this in detail. It is expected that the group will take account of these proposals when its final report on Irish competition and merger legislation is published in the Spring.

Among the recommendations worth noting are the following:

  • The Competition Authority should be given power to administer EU as well as Irish competition law. This proposal is consistent with the wishes of the European Commission and with the practice in most other EU member states;

  • Restrictive agreements and similar arrangements prohibited by the competition acts but falling within the terms of a block exemption issued by the European Commission should be automatically exempt;

  • Restrictive agreements and similar arrangements with no significant impact on competition should be excluded;

  • When notified of decisions, the Competition Authority should be obliged to adopt them within specific time limits (although some flexibility should be allowed);

  • Formal rules relating to Competition Authority procedures should be introduced;

  • The scope for appealing the Competition Authority's decisions should be limited;

  • Immunity should be afforded to those who reportinfringements of the competition acts; and

  • The criminal nature of competition offences should be retained and the director of public prosecutions should be given the resources necessary to prosecute these offences.

Sector-Specific Regulation

The report also considers the interplay between competition legislation and sector-specific regulation in industries such as telecommunications. It recommends that regulated industries should not benefit from any general exemption from the competition acts. Any exemptions should be specific, expressly stated in primary legislation and limited in time.

The report acknowledges that one of the functions of a sector-specific regulator is to introduce measures designed to encourage competition in the regulated industry. It also recognizes that this could give rise to duplication and inconsistency between the decisions of the Competition Authority and the regulator.

The report therefore sets out detailed recommendations designed to minimize the risks associated with this overlapping jurisdiction. It proposes that competition law should take precedence in the event of any conflict between the decisions of a regulator and the competition acts. This will ensure that undertakings in regulated industries are immune from criminal prosecution or liability for damages under the competition acts in respect of actions taken pursuant to a ruling, decision or approval of a regulator. Other remedies (ie, injunction or declaration) should remain available in respect of these actions except where the actions are permitted by the competition acts.

Impact on Markets

The report also notes that competition can be distorted by the impact of legislation on particular markets (eg, the taxi market, the retail pharmacy market and cement manufacturing). It makes a number of important recommendations designed to avoid this. These include procedures that would require the government and relevant ministers to consider in advance the impact of primary and secondary legislation on competition in the relevant markets.

For further information on this topic please contact Gerald FitzGerald at McCann FitzGerald by telephone (+353 1 829 0000) or by fax (+353 1 829 0010) or by e-mail [email protected].
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